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VARIETIES OF DEVELOPMENTAL STATES:
RETHINKING THE GOVERNMENT-BUSINESS RELATIONSHIP IN SOUTH KOREA AND CHAIWAN

Ah Rum Chang

This study analyzes different levels of bureaucrat’s policy autonomy over private business sector in an effort to explore the varieties of East Asian developmental states. It starts from the puzzle that Asian financial crisis of 1997-98 caused severe devastation of South Korea’s medium and small enterprise while those of Taiwan were relatively unscathed by the crisis. Conversely, financial devastation of 1997-98 harshly sweptbig business in Taiwan, compared with its punch on that of South Korea. The study argues that bureaucrat’s policy autonomy influences government-business relations and thus the two countries evolve into different developmental states. To put it differently, bureaucrat’s policy autonomy primarily influences East Asia’s industry which has transitioned from embedded mercantilism into developmental liberalism. In recent years, the growing economic ties between China and Taiwan reshape Asia’s industrial landscape. Both South Korea and Taiwan are highly industrialized countries, widely touted as archetype of successful East Asian developmental states while China emerges one of late but rapid developing nations. In this regard, South Korea, Taiwan, and China can be intriguing laboratory to rethink bureaucrat’s policy autonomy within government and business relationship. The study conducts a comparative case study of industrial policy between South Korea and Chaiwan, the combination of China’s big market and Taiwan’s advanced technology.